Neglect Will Only Engender More Gambling Addicts
The 2026 World Cup not only entertained millions of viewers, generated record profits, and gave rise to epic athletic feats, but also revealed a growing threat of a gambling epidemic. The tournament was flooded with gambling apps and prediction-market ads from beginning to end—close to 270,000 people downloaded Kalshi when the competition began. Prediction markets saw trading volumes of around $50 billion, generating unprecedented profits. While it is not surprising that sporting events increase wagering volumes, this sharp increase should be attributed not only to entertainment, but also to changes in the legal frameworks under which gambling apps and prediction markets operate.
In 2018, the Supreme Court’s decision in Murphy v. National Collegiate Athletic Association struck down the federal ban on sports betting, restoring states’ control over their gambling laws. By 2025, 39 states and the District of Columbia allowed some form of sports betting. Since then, sports gambling has exploded, and Americans have legally wagered more than $500 billion. This number is already staggering, yet, concerningly, it does not account for sports-related trading volumes in prediction markets.
State-licensed sports gambling companies, such as DraftKings and FanDuel, operate under the oversight of state gaming commissions and their services are limited to jurisdictions that have legalized sports gambling. They function like casinos; users bet against the house, and the bookmaker sets the odds. States have the authority and capacity to regulate these platforms. In contrast, prediction markets serve a similar purpose to gambling apps but operate in a way that allows them to exploit ludicrous loopholes.
Prediction markets operate on a peer-to-peer basis, meaning prices are set by supply and demand, so they are treated as financial trading tools rather than gambling platforms. This small distinction places prediction markets under the jurisdiction of the Commodity Futures Trading Commission (CFTC), rather than state gambling commissions. The main issue is that the CFTC is far less equipped to regulate them. The CFTC is an independent agency whose institutional experience lies in derivatives such as oil futures and interest-rate swaps, not in consumer gambling-style products.
The CFTC has claimed exclusive authority over prediction markets, overriding state regulators, yet it has done little to regulate them itself. The agency's leadership has weakened it from the inside while siding with the industry it oversees, including companies with financial ties to the president's family. Donald Trump Jr. is an investor in and adviser to Polymarket and a paid strategic adviser to Kalshi, raising the suspicion of a problematic conflict of interest. A New York Times investigation found that the CFTC's staff has shrunk by about a quarter and that officials who raised concerns about fraud protections and the treatment of small bettors were placed on leave.
The former acting chairman of the commission, Caroline D. Pham, left the CFTC to work for a crypto company with a Polymarket partnership, joining the very industries she was supposed to regulate. Former CFTC Chairman Timothy Massad recently said, “The overall quality of regulation suffers as does the reputation of the agency.” The CFTC currently has only one commissioner, a corporate lawyer who has represented crypto firms and prediction markets, while the other four seats remain vacant.
Whether people wager through prediction markets or sports gambling apps, one thing is clear: they are losing money. One study followed 700,000 online gamblers and found that 96 percent experienced losses. Studies of active Polymarket and Kalshi users show that roughly 70 percent of them lose money. Lower-income bettors are especially vulnerable to sports gambling because they spend roughly 32 percent more on gambling than higher-income bettors, which leaves them in a significantly weaker financial position. In 2025, Americans wagered nearly $167 billion on sports, more than the aggregate revenue of the U.S. movie, music, book, and museum industries.
More concerningly, several polls found that Gen Z increasingly view prediction markets and sports gambling as a financial plan. A survey of 1,000 Gen Z investors found that 52 percent redirected money they intended to invest toward sports betting. Young people no longer see the traditional path to financial security as reliable; instead, they believe their knowledge of a specific sports team will be enough to earn profit.
Younger generations are particularly disillusioned with the financial landscape ahead of them, and many have started to embrace what some call "financial nihilism." With rising student loan debt and a tough job market for recent graduates, some young people may see sports gambling as an attractive financial alternative. It has become normal to accept online gambling as part of our society while ignoring the forces that let this harmful dynamic take hold among younger generations.
Gambling companies, unsurprisingly, have spent $41 million to influence the upcoming federal elections, and prediction market companies have not been far behind in their efforts to influence legislation. Betting companies and legislators benefit while vulnerable people are targeted. It is worth clarifying that legalized sports gambling can and does bring significant tax revenue and needed jobs to some states. A legal, regulated framework is necessary to prevent black markets from absorbing that potential tax revenue. However, reforms that truly protect consumers are still needed.
Until recently, prediction markets remained largely untouched. Last month, however, the US Court of Appeals for the Sixth Circuit ruled that states can regulate prediction markets’ sports contracts under their gambling laws. The question is expected to reach the Supreme Court, and it remains uncertain how the justices will rule and how they will allow states to restrict these platforms.
Even where sports gambling is legal, there need to be mechanisms that prevent companies from targeting vulnerable customers prone to addiction. Spain, for example, implemented a law restricting the hours during which online gambling companies could air advertisements, which led to a decrease in new accounts and total money wagered. In the United States, some unsuccessful federal initiatives have been proposed. The Supporting Affordability and Fairness with Every Bet Act (SAFE Bet Act) proposes a good blueprint for regulating online gambling by prohibiting the use of credit cards, restricting constant advertising, and limiting terms such as “bonus bet.” It would also make companies run affordability checks to ensure deposits are no more than 30 percent of a bettor’s monthly income. Although it is difficult to envision this bill being passed, it offers possible solutions to what seems like an unmanageable problem.
The appetite for sports gambling will persist regardless of its consequences. However, litigation and public awareness should play a greater role in limiting the overreach of prediction markets and gambling companies. People’s economic hopes and stability should not rely on a winning hockey parlay or an arbitrary event posted on Polymarket. If sports gambling continues to be treated as an isolated, individual choice made for entertainment, and powerful companies keep exploiting loopholes and people’s desperation, gambling addiction will only rise, with people paying a high emotional and financial price.